“The domestic tractor industry for FY24 at 8,75,700 units registered a degrowth of 7 per cent over last year’s (FY23) 9,45,300 units mainly because of erratic and uneven rainfall distribution that impacted kharif output, coupled with the high industry base of FY23,” it said.
On the outlook and opportunities, Swaraj Engines in its management discussion and analysis said factors like increasing affordability with adequate availability of financing, growing demand for farm mechanisation due to increased scarcity of labour, emergence of newer technologies in the farming sector are likely to sustain the tractor demand momentum.
“Further, the continued focus of the government on improving the state of agriculture in India and several initiatives taken by it to drive higher rural incomes through a periodic revision in Minimum Support Price (MSP), monetary support to marginal farmers, crop insurance, encouraging diversification towards high-value crops, agriculture accelerator fund to promote technological advancement in agriculture etc, will augurs well for the industry to grow in medium to long term,” it said.
In this backdrop, the company said, “Engine business of the company is likely to move in tandem with the industry.” Swaraj Engines said the Indian tractor industry, the world’s largest by volume with a mix of Indian origin and international manufacturers, has been traditionally segmented by horsepower (HP) broadly — low horsepower up to 30 HP segment, mid segment of 30 HP – 50 HP, and the higher segment of above 50 HP. “Over a period of time, the medium and higher HP segments have become popular owing to tractor versatility and the evolution of farming practices, especially for farmers with large land holdings,” it said.
Further, the growing horticultural segment in the country also offers good opportunities to increase tractor penetration in the lower HP market segment with cost-effective products, the company added.